How to choose between notice periods and instant access for business savings

Is flexibility more important than returns? Or is a higher interest rate worth locking your money away? 

With business savings accounts, deciding between a notice account and instant access isn’t always straightforward. In 2025, businesses are rethinking how they manage surplus funds.   

If you're exploring your options, our Business Rewards Account with an instant access Savings Pot could help you earn more with competitive rates. If not, let’s keep going. There’s plenty to cover. 

Key differences between notice period and instant access

It’s easy to assume all business savings accounts work the same way, but the details can make a real difference.  

Notice accounts ask you to wait a set number of days before you can access your savings. In return, you often get a better interest rate. Instant access accounts let you move your money whenever you need to, which is useful for emergency funds or short term savings where flexibility matters more than a higher return. 

The key is choosing the right account for the right purpose. If you want to earn more interest on money you don’t need straight away, a notice savings account could make sense. If quick access is more important, an instant access account gives you that option without complications. 

How FSCS protection applies to
both types 

Are notice accounts and instant access savings accounts both covered by FSCS protection? The short answer is yes, as long as the provider is a UK-authorised bank, building society, or credit union. The Financial Services Compensation Scheme protects up to £85,000 per eligible business, per institution. 

That protection applies whether your money is in a fixed term, notice, or instant access account. But to be absolutely sure, it’s always worth checking the FSCS bank checker or the FCA register. Not every provider that looks like a bank online is actually authorised. 

If your provider were to fail, FSCS usually refunds protected deposits within seven days. There’s no need to apply in most cases. It happens automatically, as long as your money meets the eligibility criteria. That peace of mind makes a big difference when deciding where to place large balances. 

How interest is calculated and paid 

Business savings accounts can offer either fixed or variable interest rates. Fixed rates give you certainty while variable rates can change depending on the provider. Most accounts show the annual equivalent rate so you can see how much interest you’ll earn over a year. 

Interest might be paid monthly or annually and may be paid gross or with tax deducted. Either way, it usually needs to be reported as part of your tax return. 

A few things to check: 

• Minimum balance needed to earn interest 
• Maximum balance limit that might affect returns 
• How often interest is paid and whether the rate is guaranteed 

The return may look small at first, but it adds up faster than you think. 

Accessing your money: notice periods vs instant withdrawals 

With a notice account you can’t just dip in whenever you like. If it says thirty days’ notice that means, you’ll need to formally request the withdrawal and then wait thirty calendar days before your money is released. Miss that window or try to take it out early and you might lose interest or face a penalty. 

Instant access accounts are the opposite. You can move money the same day which is helpful when you’re covering a tax bill or an unexpected cost. It’s also easier for operational flexibility if you’re running payroll or topping up a current account. 

That said, too much access can lead to impulsive decisions. We’ve seen businesses dip into savings during a quiet month then struggle when something bigger comes up. Instant access gives you flexibility, but a notice account can add just enough friction to keep your financial strategy on track. 

The trick is knowing which account suits which type of money and setting clear boundaries for each. 

Evaluating based on your business structure and strategy 

Different businesses need different types of access. A sole trader might want flexibility while a limited company may prioritise a higher return on spare funds. Your structure and cash flow shape the best fit. 

Things to consider: 

• Sole traders may lean toward instant access for emergencies
• Limited companies can benefit from fixed notice terms for surplus money 
• Limited liability partnerships may split funds based on partner needs and responsibilities 

Many businesses choose to mix both account types. It’s a practical way to balance growth and access without overcomplicating your savings strategy. 

Questions to ask before choosing an account 

Choosing the right savings account starts with asking the right questions. It’s not just about chasing the highest interest rate, it’s about how the account fits your day-to-day operations and long-term plans. 

Ask yourself: 

• Do you need to access your money at short notice, or can it wait? 
• Are you comfortable locking funds away for a fixed period? 
• What kind of interest rate are you aiming for and is it fixed or variable?
• How consistent is your cash flow month to month? 
• Is the account fully protected by the Financial Services Compensation Scheme? 

Being honest about your business needs upfront, can save you time, stress, and missed interest later on. 

Final thoughts 

Choosing between notice and instant access savings accounts comes down to what your business needs now, and in the future. It’s not about picking the “best” one, but the one that fits your cash flow, financial goals and operating rhythm. 

Many businesses benefit from using both. Instant access for flexibility, notice accounts for higher returns. Together, they give you the structure to save with confidence and the agility to adapt when needed.  

Make your money work on your terms 

Our Savings Pot, linked to our Business Rewards Account, offers up to 4.33% AER *(variable) with instant access, monthly interest payments and no account opening fees. It’s designed to help your business grow its reserves without locking your money away. 

You’ll also have a dedicated relationship manager to support you as your business evolves, helping you make confident financial decisions. 

Start building with purpose. Open your Savings Pot today via our Business Rewards Account and take the next step toward stronger cash management. 

*Rate includes standard rate of 3.33% AER (minimum balance applies) plus a 0.5% boost each month if you make 15 bank transfers out of the account in the previous month, and a 0.5% boost for six months if you complete a switch with CASS. Rates correct as of 2 June 2025. ‘AER’ stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. Subject to eligibility – see Savings Pot Key Product Information for more details.

Links were live and information was correct at the time of writing the article.

Disclaimer: This is information – not financial advice or recommendation

The content and materials featured in this article are for your information and education only, and are not intended to take into consideration any particular recipients’ financial situation. The product details and interest rates referred to are correct at the time of writing.

The information does not constitute financial advice or recommendation and should not be considered as such. Allica Bank will not accept any liability for any loss, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.